I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. I have written for The Times, Daily Telegraph, Express, Independent, City AM, Wall Street Journal, Philadelphia Inquirer and online for the ASI, IEA, Social Affairs Unit, Spectator, The Guardian, The Register and Techcentralstation. I've also ghosted pieces for several UK politicians in many of the UK papers, including the Daily Sport.

What Is It With This Nostalgia For Manufacturing Jobs?

I have to admit that I just don’t get it. Why is it that so many people are nostalgic for the days of mass employment in manufacturing? More, why is it that even generally bright and well informed people just cannot understand that those days are never coming back? Even someone like Felix Salmon just doesn’t seem to understand:

US manufacturing in fact is extremely competitive on a global scale; the problem is that output has lagged productivity improvements, with the result that we’re making more stuff with ever fewer people.

This is not a problem. Making more stuff with fewer people means that the people freed up can go and do something else. Run insurance exchanges for Obamacare for example. Think the basics through here. At date one we need 40 people to do the manufacturing we want to have done. At date two we need only 30 because of that rising productivity. This means we now have 10 people who can go and do something else other than manufacturing. We, as a society, are now richer by that extra production of whatever it is plus the manufactures.

Requiring less human labour to do something is a good thing.

Further, Salmon isn’t actually correct in his facts:

There’s no particular reason why that should be the case: when manufacturers in China and Germany become more efficient, that’s their sign to employ more people, rather than fewer. As each employee becomes increasingly profitable, it makes perfect sense to keep on adding more employees. Or at least it does in some countries. In the US, by contrast, capital is cheap and plentiful, and there’s much more incentive here to replace people with capital goods wherever possible.

I’m sorry but this just isn’t true. Germany has been shedding manufacturing workers as one of his own commenters shows Salmon.

Also, it is not that capital is cheap in the US: it’s much cheaper in China than it is in the US at present. It is that US labour is expensive. This is also a good thing: expensive labour means that workers have high wages, rather one of the things that we’re trying to engineer in an economy.

But there’s more! Manufacturing is shrinking as a portion of the economy in every country. Further, every country is shedding manufacturing jobs: yes, even China. The jobs are not being offshored to Mars, they’re being destroyed by rising productivity. It is simply true that the amount of labour we need to manufacture things is falling faster than the amount of things we want manufactured is rising.

We shouldn’t be afraid of this: we should welcome it rather. For this is what has happened with agriculture over the past 300 years. We used to need 90% of the population working in the fields to feed 100% of the population. Now we use between 1 and 2% of the population to feed the 100%. We used to use 30-50% of the population working in factories to make the physical goods we wanted. Now we need under 10% (this does change depending upon country) and falling. It won’t be long, probably not in my lifetime but quite possibly in your, that working in manufacturing will be like doing so in agriculture. A slightly odd thing that some 1 or 2% of the population does. Everyone else will be in services of some kind.

I’m really sorry but I simply do not understand all of these people nostalgic for some past and vanishing world. Manufacturing as a source of mass employment is just never coming back: get used to the idea.

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